The Securities and Exchange Commission announced that on Friday, July 13, 2001, it charged William L. Brotherton ("Brotherton"), an unlicensed Colorado chiropractor, and the company he founded, International Business Consortium, Inc. ("IBC"), with perpetrating a fraudulent, unregistered offering of $20 million in IBC stock over the internet. The Complaint alleges that the offering began early in 2001 and continued into July, and that the defendants raised over $300,000 from selling IBC stock to at least 180 investors. IBC holds itself out as a promising start-up preparing to offer discount workers' compensation insurance when, according to the allegations, it has deceived investors about, among other things, its true state of development and operations. The Commission alleges that IBC and Brotherton have misappropriated at least 25% of the offering proceeds for the personal benefit of Brotherton and certain of his relatives. The Complaint, filed in the United States District Court for the District of Colorado, charges the defendants with violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 ("Securities Act"), Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act"), and Rule 10b-5 thereunder.

The Complaint names as defendants:

Brotherton, age 60, who resides in Fort Collins, Colorado. Brotherton is, and was at the time of the events alleged herein, IBC's president, vice-president, secretary, treasurer and sole director.

IBC, which is a Colorado corporation whose sole business address is Brotherton's residence. IBC is not and never has been registered with the Commission in any capacity.

According to the Complaint:

In a private placement memorandum, which defendants posted on the internet as recently as early as last week, and through other means, defendants knowingly have made five categories of material misrepresentations about IBC to prospective investors:

Misrepresentations about IBC's Purported Business. IBC and Brotherton have falsely claimed, for example, (1) that a separate entity, "Conservative Health Care Corporation" ("CHCC"), will serve as the health care provider under IBC's business plan and has 940 member doctors when both statements are complete fabrications; (2) that certain individuals are part of the management team of CHCC or IBC when the individuals identified deny that they have anything to do with those entities; and (3) that employers have stated an intention to become IBC customers.

Misrepresentations about IBC's Purported IPO. Defendants baselessly have claimed that IBC "will be public" by June 1, 2002. There is no evidence that IBC is in any position to consider an initial public offering or that it has taken any steps for prepare for one.

Misrepresentations about the Use of Proceeds. Brotherton and IBC have told investors that IBC will use offering proceeds to buy an insurance company even though there is no evidence of any bona fide attempts to do so and even though Brotherton has misappropriated a substantial portion of the investor funds.

Misrepresentations about SEC. Brotherton has lied to investors that IBC stock is "registered" with the SEC and that the SEC has reviewed IBC's scientific research.

Misrepresentations about Risk and Return. Defendants have promised outrageous returns ranging up to 2,099,900% annually with minimal risk.

Also on Friday, the Commission moved for an order granting emergency relief to halt the fraud including orders (a) temporarily restraining, and preliminarily enjoining, defendants from violating Sections 5(a), 5(c) and 17(a) of the Securities Act, and Sections 10(b) of the Exchange Act and Rule 10b-5 thereunder; (b) freezing defendants' assets; (c) directing defendants to provide verified accountings; and (d) prohibiting the destruction, alteration, or concealment of documents; and (e) providing that the Commission may take expedited discovery.